Canada unexpectedly sheds 40,800 jobs, most since pandemic
Of the 1.6 million unemployed in July, 23.8% have been looking for work continuously for 27 weeks or more
[OTTAWA] The Canadian economy lost the most jobs since January 2022, and excluding the pandemic, it’s the largest drop in seven years.
Employment fell by 40,800 positions in July, driven by decreases in full-time work, while the jobless rate held firm at 6.9 per cent, Statistics Canada data showed on Friday (Aug 8). The number of job losses surpassed even the most pessimistic projection in a Bloomberg survey of economists.
The monthly decline was concentrated among youth ages 15 to 24, who are usually among the first to experience a labour-market downturn. Their unemployment rate reached 14.6 per cent, the highest since September 2010 outside of the pandemic. The employment rate for youth fell to the lowest since November 1998, excluding the years impacted by Covid-19.
The Canadian labour market failed to sustain its strong momentum from June, when it surprisingly added the most jobs in six months. The Bank of Canada held its policy interest rate at 2.75 per cent for a third straight meeting last week, but said the labour market remains soft, with the unemployment rate rising from 6.6 per cent at the beginning of the year.
Of the 1.6 million people who were unemployed in July, 23.8 per cent had been continuously searching for work for 27 weeks or more. This was the highest share of long-term employment since February 1998, not including the pandemic.
Compared with a year earlier, unemployed job searchers were more likely to remain jobless from one month to the next. Nearly 65 per cent of those who were unemployed in June remained so in July, versus 56.8 per cent from a year ago. The layoff rate, however, was virtually unchanged.
The employment rate – the proportion of the working-age population that’s employed – fell 0.2 percentage points to 60.7 per cent in July. It was down 0.4 percentage points from the start of this year.
The private sector lost 39,000 jobs last month, and public-sector employment was little changed. Job losses were driven by information, culture and recreation, as well as construction and business, building and other support services. Transportation and warehousing added jobs for the first time since January.
Employment fell in Alberta and British Columbia, while it was virtually unchanged in Ontario and held steady in Quebec. Saskatchewan was the only province to record job increases in July.
Total hours worked fell 0.2 per cent in July, and were up 0.3 per cent from a year earlier.
Yearly wage growth for permanent employees accelerated to 3.5 per cent, from 3.2 per cent, versus economist expectations for compensation gains to slow to 3.1 per cent. BLOOMBERG
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